In Picking Facebook Shares, Repeating the Mistakes of the Past  | Since the implosion of the dot-com bubble in 2000, retail investors have been rightfully wary of the stock market. Facebook was going to change it all, bringing the ordinary investor back, the Deal Professor writes.
Instead, Facebook was a massacre for retail investors, highlighting yet again why stock picking is a loser's game. The hype around Facebook was enormous as retail investors salivated at the chance to buy what they hoped would be the next Apple. Yet, after initially trading above $40 a share, the stock is now down nearly 43 percent from t he initial offering price.
The Facebook example is one more confirmation of studies that have shown that, on average, individual investors lose out consistently when they buy and trade individual stocks. They're better off investing in passive index funds.
Professors Brad M. Barber and Terrance Odean recently released a paper surveying the evidence. Studies of individual investor trading found that “many investors earn poor returns even before costs.†These investors trade badly and tend to lose more money than they would using a simple buy-and-hold strategy in passive funds that match indexes like the Standard & Poor's 500-stock index.
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MGM Said to Plan a Buyout of Icahn's Stake  | Metro-Goldwyn-Mayer plans to buy out Carl C. Icahn‘s entire stake in the film st udio for about $590 million, as preparation to eventually go public, a person briefed on the matter said on Tuesday.
The move could help smooth the path for MGM to join the stock markets by providing an exit for a notoriously outspoken investor. Mr. Icahn bought into the film studio's debt to try to force the company into a merger with Lionsgate Films, a campaign that failed.
M.G.M. instead struck agreements with a number of creditors that allowed the company to file for a prepackaged bankruptcy, which shortened its stay in Chapter 11 protection. Under the terms of that filing, the film studio's creditors essentially took control, making Mr. Icahn one of the company's biggest shareholders. A spokeswoman for MGM declined to comment.
DealBook '
A Call for Regulation, Not Breakups  | < /span> Steven Rattner, a former Wall Street executive who also served in the Obama administration, writes in an op-ed piece in The New York Times that Sanford I. Weill's call to break up big banks was an “ill-advised distraction.â€
NEW YORK TIMES
Economic Thinkers Offer Proposals for Europe  | Three men who are respected in top policy circles are each aiming to be the next George C. Marshall or Nicholas F. Brady, with grand plans to save Europe from financial ruin, The New York Times reports.
NEW YORK TIMES
Hedge Fund Charity Parties in the Hamptons  | On Saturday, about 150 hedge fund workers attended “Behind the Hedges,†an event held by the charity Hedge Funds Care that raised money to prevent and tre at child abuse, Bloomberg News reports.
BLOOMBERG NEWS
For Rent: Office Space in Lower Manhattan  | The owner of the World Financial Center has embarked on a $250 million renovation of the building in an effort to attract new tenants, after three large firms, Nomura, Deloitte and Bank of America, gave up all or most of their office space there and defected for Midtown, The New York Times reports.
NEW YORK TIMES
Maple Group Wins Battle for Toronto Exchange Parent  | The Maple Group, a consortium of Canadian financial firms and pension funds, acquired 91 percent of the shares in the TMX Group, securing its $3.7 billion buyout of the Can adian bourse.
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Dun & Bradstreet Said to Consider a Sale  | Dun & Bradstreet, a financial information provider, has hired bankers as it explores a potential sale of itself, according to a person briefed on the matter.
DealBook '
Google Snaps Up Wildfire  | Google has agreed to acquire Wildfire, which helps brands manage their social campaigns across sites like Facebook, Twitter and Pinterest.
DealBook '
24 Hour Fitness Is Said to Be on the Block  | Forstmann Little, the private equity firm that owns 24 Hour Fitness, has hired Goldman Sachs to run an auction that is expected to fetch abo ut $2 billion.
DealBook '
Rona of Canada Rejects $1.8 Billion Offer From Lowe's  | After Rona rejected a $1.8 billion takeover offer, its American rival Lowe's said it would continue to pursue a deal, but it could meet with further resistance in Quebec.
DealBook '
Fraser and Neave Said to Seek Higher Offer for Brewery  | After considering Heineken $6.1 billion bid for Asia Pacific Breweries, the brewery's owner is trying to negotiate a higher offer, Reuters reports, citing unidentified people with direct knowledge of the matter.
REUTERS
Societe Generale Profit Falls 42% as Economy Slumps  | Société Générale posted a disappointing quarter, as the French bank got buffeted by the global economic headwinds.
DealBook '
Standard Chartered's Profit Rises to a Record  | Standard Chartered, a British bank that focuses on Asia, said its profit in the first half of the year rose 12 percent to $2.81 billion, The Wall Street Journal reports.
WALL STREET JOURNAL
Top Credit Suisse Deal Maker to Take Post in Chicago  | Steven Koch, Credit Suisse's co-chairman of mergers and acquisitions, will leave his perch at the Swiss bank to become a deputy mayor of Chicago in Rahm Emanuel's administration.
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Credit Suisse Hires Oil and Gas Banker From BMO Â |Â Credit Suisse has hired Bruce Cox to serve as the head of acquisition and divestiture in its investment banking division's oil and gas group, according to an internal memorandum reviewed by DealBook.
DealBook '
Two Big European Banks Report a Plunge in Profit  | Deutsche Bank of Germany and UBS of Switzerland were hit by drops in trading activity. The banks warned that continued market volatility would most likely affect future growth.
DealBook '
Skepticism Over Wealth Management in Asia  | Some millionaires in Asia have become disillusioned with private wealth managers, opting t o manage their assets themselves, Bloomberg News reports.
BLOOMBERG NEWS
Silver Lake Said to Raise $4 Billion for Fund  | Silver Lake, a private equity firm focused on technology, is seeking a total of $7.5 billion for its new fund, with the option of raising as much as $10 billion, Bloomberg News reports.
BLOOMBERG NEWS
Buyout Firms Said to Circle a Research Lab  | The research service Mergermarket said that private equity firms are considering a leveraged buyout of Laboratory Corporation of America Holdings, a lab-testing company with a market capitalization of $8.1 billion, according to Reuters.
REUTERS
Ice Cream Maker Said to Be on the Block  | Wells Enterprises, a privately owned company that makes Blue Bunny ice cream, was said to have drawn interest from firms like Oaktree Capital Management, The Financial Times reports.
FINANCIAL TIMES
Credit Hedge Funds Gain Favor Among Investors  | A survey by Credit Suisse found that 53 percent of investors planned to allocate money to credit relative value funds, which take advantage of opportunities like the one that caused the huge trading loss at JPMorgan Chase, Reuters reports.
REUTERS
Trial Begins for Founder of Whitman Capital  | Prosecutors told a jury on Tuesday that Doug Whitman, of Whitman Capital, traded on insider tips about Google and other companies, Bloomberg News reports.
BLOOMBERG NEWS
Asian Firm Teams Up With Brevan Howard to Start Fund  | A Hong Kong-based asset manager within the China International Capital Corporation is starting a new hedge fund with Brevan Howard Capital Management in an effort to attract Asian investors, The Wall Street Journal reports.
WALL STREET JOURNAL
Zynga Shakes Up Top Management  | The social games company reorganized its leadership as part of an effort to spur growth after a disappointing quarter, The Wall Street Journal reports.
WALL STREET JOURNAL
Zynga Sued by Shareholders  | Investors are claiming in a pair of lawsuits that Zynga failed to warn them about declines in user and revenue growth, Reuters reports.
REUTERS
Architects of Corporate Regulation Criticize New Law  | Paul Sarbanes and Michael Oxley, who gave their names to the Sarbanes-Oxley Act, used the planned I.P.O. of Manchester United as an example to show the flaws of a new law that relaxes rules for initial public offerings, Reuters reports.
REUTERS
Money Transfer Service Said to Prepare to Go Public  | Xoom, a San F rancisco-based online money transfer service, has hired Goldman Sachs as the lead underwriter for its I.P.O., Reuters reports, citing unidentified people familiar with the situation.
REUTERS
Twitter Backpedals After a Controversy  | A Twitter executive personally apologized after an incident that caused some to say the company appeared to be censoring a user's account because of a corporate relationship, the Media Decoder blog reports.
NEW YORK TIMES MEDIA DECODER
Box, an Enterprise Software Firm, Announces New Financing  | Box said it raised $125 million, with $100 million coming from the private equity firm General Atlantic, The Wall Street Journal reports.
WALL STREET JOURNAL
Cloud Company Looks for Allies  | A company called Rackspace is using open source software to power its public cloud of Internet-connected computers, the Bits blog reports. The idea is that by drawing on the efforts of programmers outside the company, it will be able to compete more effectively with giants like Google, Amazon and Microsoft.
NEW YORK TIMES BITS
Social News Site Gets a Makeover  | Betaworks, which bought Digg in early July after the social news aggregator had lost much of its audience, unveiled a totally redesigned vision for the site.
NEW YORK TIMES BITS
Ex-Citigroup Manager Cleared in Suit  | The Securities and Exchange Commission lost its lawsuit against Brian Stoker, who was accused of negligence in preparing sales materials for a complex mortgage-related investment.
DealBook 'Â |Â Document: Securities and Exchange Commission v. Brian H. Stoker
One Rule Regulators Are Rounding On  | Is a new requirement that banks need to have a stockpile of cash and high-quality, easy-to-sell assets to meet withdrawals in the event of a market panic making it harder for banks to fund themselves?
DealBook '
Regulator Opposes Plan to Ease Housing Debt  | After a study showed that taxpayers might save money if Fannie Mae and Freddie Mac were to offer debt forgiveness to borrowers, the director of the Federal Housing Finance Agency said his agency would not let such a program take place, The New York Times reports.
NEW YORK TIMES
MF Global Trustee Expects Customers to Be Made Whole  | Louis J. Freeh, the trustee for MF Global Holdings, said in testimony prepared for a Senate committee that he believed customers of the bankrupt brokerage firm would recoup their money, Bloomberg News reports.
BLOOMBERG NEWS
S.E.C. Calls for Reforms of Municipal Bond Market  | The Securities and Exchange Commission urged broad reforms of the market where cities raise money, but noted that it could not make the changes happen without an act of Congress, The New York Times reports.
NEW YORK TIMES
Olympus Sued by Shareholder Over Loss  | Terumo Corporation, a Japanese medical device maker, is demanding to be compensated for a loss on its Olympus shares, Olympus said, according to Reuters.
REUTERS
2 Poker Sites Agree to Give Up Millions  | Federal prosecutors said PokerStars and Full Tilt Poker agreed to settle money laundering and fraud charges, The New York T imes reports.
NEW YORK TIMES
